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Commander bankruptcy hearing continued to Jan. 17

Wednesday, December 14, 2011

Commander Premier Aircraft Corp.'s 52,000-square-foot municipally-owned hangar at the Cape Girardeau Regional Airport on Sept. 26, 2011.
(Fred Lynch)
A bankruptcy judge in Texas has given Commander Premier Aircraft Corp. another month to reorganize before he will consider Cape Girardeau's motion to allow the company's assets to be liquidated.

Judge Bill Parker of the U.S. Bankruptcy Eastern District of Texas on Tuesday continued the hearing until Jan. 17, when he will consider the city's motion to switch the bankruptcy status from Chapter 11 to Chapter 7.

"There's a couple of folks out there saying they might be interested in doing some reorganization of the company," city manager Scott Meyer said. "So they came forward at the last minute."

The city, which is owed more than $800,000 from the failed aircraft manufacturer, is asking the judge to convert the bankruptcy status to allow assets to be sold so it can recoup its loss. Some assets remain at the hangar Commander had occupied at the Cape Girardeau Regional Airport until the company was evicted in October.

City officials were fine with the continuance, Meyer said, because -- depending on how the reorganization works out -- the city could recover more. But Meyer said they will only be fine with it for 30 more days.

"They need to put some money down to show they're serious," Meyer said. "If not, we will be back and asking to go ahead and liquidate."

Meyer said he's not sure which outside parties are interested in investing in Commander, which owes the city money after failing to make a single lease payment since December 2007. But they do intend to come to Cape Girardeau and inspect the assets that are still at the hangar, Meyer said.

"We're willing to give them time to do that and see if it could work out," Meyer said. "Quite frankly, I'm skeptical. But what the city could gain is significant."

Executives with Commander and lawyers for the company did not immediately return phone calls Tuesday afternoon.

But court documents filed Monday offer a hint of what the company is thinking. The document, filed on behalf of former company president and investor Joel Hartstone, says Commander maintains the Federal Aviation Administration's Parts Manufacture Approval and its Quality Assurance Program, which cannot be transferred to another entity.

If they find a buyer, those approvals could transfer to the new owner, the document says. It took Commander two years to prepare for and obtain those approvals. If a Chapter 7 were granted, any buyer of those assets, however, would not have those approvals, according to the documents.

That makes the company more valuable if it is sold rather than liquidated, the documents say. Any knowledgeable buyer seeking Commander's production assets to produce new aircraft would pay much more if the FAA approvals were still in place, the filing says.

There are people interested in buying the company, though none have submitted firm offers. Some of the potential buyers, the filing says, are only interested in the company if its status is Chapter 11.

The company, in the filing, asks the judge to deny a status change to Chapter 7. Additionally, it asks that the company be allowed to liquidate up to $175,000 of "easily sold tangible assets" to create estate liquidity.



Pertinent address:

Cape Girardeau Regional Airport, Cape Girardeau, MO

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Notice that the bankruptcy filings are in a different company name? Commander PREMIUM. Very weird!

-- Posted by fly_on_wall on Wed, Dec 14, 2011, at 8:35 AM

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